We are now in a new era of extending declining house losses, way too much government intervention, and a new found realization that not everyone can buy a house. Going forward into the unforeseeable future many people will NOT be able to purchase a house. Many first time home buyers will be out of the market as of April 1st because of more financial reforms, others just won’t qualify because of lower credit scores and some won’t be able to buy because they have no way of saving a down payment because of increased cost of living. This is a sad moment in our history, NOTHING has improved in the real estate market since the downturn begin in 2007. Most business cycles have been seven years, it looks like the housing market may be ten, and really may not be considered starting until September 2008 ???? Yyks! Does that mean 2018? How long can a cycle last and what will cause the cycle of deflation in housing to change.
Well first and foremost, we need demand- and that just isn’t happening. We need money earned, jobs and stability in our economy. Do you see or feel any one of these factors occurring? This trend may stay for several years and only as families grow will more need for new houses occur, a new generation of buyers, jobs, and a different administration. A lot of outside factors are going to need to change before any price increases occur. A few areas have stabilized, but most markets are slow or declining. As the spring selling quarter begins we will all be holding our breath hoping for a small increase. No one, except homeowners seems to be worried or addressing this issue, many people are sitting thinking things will soon change and values will go back up to where they were a few years ago- sorry you have lost it, most, if not all your equity from 2005-2009. When prices do begin to go up it is usually very very slow 3% a year.
It may become to trend to rent, rental prices have stabilized and many people can’t afford the repairs, taxes or down payment. That is ok, especially if you own rentals, but beware now may not be the time to buy, especially if many local governments take away the mortgage income tax credit. There is going to be NO advantage to owning a home soon!